London - Richard Branson's Virgin Media U.K. pay-TV service announced on Thursday that it has stopped airing basic channels owned by rival News Corp.'s Sky service, after the companies failed to renegotiate a carriage agreement.

Virgin said that Sky had demanded that fees for its basic channels be nearly doubled, despite a ratings decline of "20% in the last three years."

The deal does not affect Sky's sports or movie channels, which will still be available on Virgin Media.

"Nothing Sky have said or done in the course of the negotiation indicates they had the slightest interest in doing a commercially viable deal," said Virgin Media CEO Steve Burch.

"Their action here is consistent with their plans to withdraw their free channels from Freeview and, in our view, reflects their desire to limit consumer choice."

Virgin Media said it will use the funds saved to further build on recent programming acquisitions.

The company launched an on-demand service called Virgin Central that offers 2,700 hours of U.S. shows like "The Sopranos," "Nip/Tuck" and "Lost."

Related Links:
http://www.prnewswire.co.uk/cgi/news/release?id=191958

http://www.sky.com

http://www.virginmedia.com